Spokane Real Estate Market Forecasts
Like most of the country, the Spokane real estate market is expected to rise at a steady, although slower, pace in 2022, according to numerous experts. There is still a high housing demand in the Spokane housing market. The median home price in Spokane County increased to $430,000 in March 2022, up from $341,750 in March 2021, according to data from the Spokane Association of Realtors. Is it possible for this upward trend to continue? Not according to Michael Sanborn, co-owner and mortgage broker at Catlin Capital, Inc.
“Many industry professionals mention low inventory as the problem, but I would emphasize the unprecedented demand created by the ultra-low interest rates of the last few years,” says Sanborn. “This has led to housing speculation again, riddled with occupancy fraud in many cases. Buyers claiming to be buying a new ‘primary’ or ‘secondary’ home, only to immediately rent out the new home full time. The much lower down payment options allowed for this occupancy could easily mean problems in the future when vacancies and home values drop.”
An increase in mortgage rates and price reductions, combined with a cooling of sales, may be signs of a market rebalancing. Closed sales of single-family homes on less than one acre including condos through March 2022 total of 538 compared to 572 through March 2021. Home sales were down 5.9% from a year ago.
Spokane Housing Market Trends
Spokane is currently a hot seller’s real estate market – which means that the demand from buyers is exceeding the current supply of homes for sale. Historically low-interest rates, tight inventory, and strong demand favored sellers in the Spokane housing market. The pricing of homes has been trending higher and is more attractive for sellers in the current phase.
“Many of my mortgage clients have offered 10%+ over list price and have still not been the winning offer,” says Sanborn. “There is little to no time for a buyer to consider whether a home is right for them. The only strategy that works currently is to make an immediate decision and to over-pay the most, if you want the home. It sounds like tremendous duress for buyers, so balance coming back to the market is a VERY positive and healthy thing.”
Spokane Real Estate Market History
Over the last decade (since May 2012), the typical home value in Spokane County has appreciated by around 163.22%. Though Spokane house prices remained almost flat from 2012 to 2015, home values have gone up 28.2% over the past year alone. Does that mean investing in Spokane real estate is always going to provide a great return?
“Purchasing rental property should be approached like any other investment,” says Sanborn. “Long-term real estate has traditionally been a sound investment. But, it is the potential for vacancy, low or even negative monthly cash flow due to higher interest rates/limited down payment, and cost to sell the home that can substantially impact a new investor. Acquiring property at a reasonable pace allows one to experience any pitfalls or setbacks gradually, rather than allowing FOMO to direct investment decisions.”
Buying or selling real estate is one of the most important decisions one will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
The Loan Officers at Catlin Capital are available to discuss your plans, review all of your financial details and provide a pre-approval letter that will allow you to shop confidently, whether for a new primary residence or your first (or tenth) rental property. Call us today or visit our website today – www.CatlinCapital.com.
